Is buying Gold coins a Good Investment in India (2024)?

Do you think gold coins are a good investment to make? You may or may not think like that but gold coins have a definite appeal among the people of India. And this is for thousands of years.

Investing in gold is a wise thing to do. At least for 5-10% of your long-term portfolio. While there are several forms of gold available for investments, many consider gold coins as a better option compared to gold jewellery given its benefits.

• With gold coins, you can buy the purest form of gold in various denominations and sizes. Starting from 0.25 grams, gold coins now go up to 20 and even 50 grams these days.
• While gold jewellery is often purchased for emotional and cultural reasons, gold coins can be considered pure investments.
• Gold coins are available in 99.5% purity or 24K (24 Karat)
• Unlike gold jewellery where you need to pay up to 20% in making charges, the gold coin minting charges are very small. Though you still won’t get gold at a rate which is generally shown online or in media (as today’s gold rate), you still pay a lot less in making charges for gold coins.
• Generally, gold coins don’t require much maintenance so that is not an issue. Gold stays as it is for decades. Of course, safe storage of gold is something to take care of and may come at a cost.
• It is relatively easier to buy and sell gold coins for investment compared to gold jewellery.
• Also, jewellery brought from one jeweller when sold to another fetches a lower price due to so-called ‘cuts’. This is because the second jeweller pays only for the gold and not for the making charges, etc. that you paid to the first jeweller. But generally, gold coins do better on this front though practically speaking, you still don’t get the full value back in case you sell your gold coins.

Interestingly, these days I have seen some younger people looking at investing in gold coins in addition to other assets like equity, debt and real estate. These days, many prefer investing in gold via other options like Sovereign Gold Bonds vs Gold ETFs, etc. But if you walk into a decent gold store, then you will witness that the demand for gold coins is not going anywhere. Like centuries ago, it is here to stay for centuries more. And that is because gold is a good store of value. It may not beat assets like equity in the long-term returns, but it still gives reasonable returns and is a good hedge against inflation.

Though not a commonly held view, some people of the current generation still prefer investing in physical gold over online forms like gold bonds, ETFs, etc. as it’s tangible and if things go down to worst at a global level, then having physical gold might be a better option than an online one (as is the case with many countries which face revolutions, unrests, etc.)

Do check the historical gold prices in India to see how gold prices have been gradually going up over the decades. And there is nothing to point out that this trend will not continue in future. Gold does pretty well on the factors of stability, security, and longevity. And that is the reason why gold is still, the gold standard.

Also, there can be doubt about the purity of gold purchased from local small jewellers. So it’s better to purchase it directly from reputed, licensed gold dealers, government organizations that sell gold coins like MMTC, etc. Gold rates or the gold per gram rate changes every day. So when you are planning to buy gold, do check the latest gold price today. Do not buy gold coins if the per gram rate is very different from the latest gold rates. Though some deviation is normal.

In my view, all long-term investment portfolios should have some allocation to gold (5-15%). Do read Should I invest in gold? Though some people also think that if they sell unused gold jewellery, it can help them get control of their finances. But everyone has an opinion of their own and who are we to judge what is right and what isn’t?

If you want to invest in gold, then don’t buy gold jewellery. Instead, invest in gold by using a mix of gold bonds, gold ETFs and physical gold (via gold coins or bars).

I hope you found this article on buying gold coins as an investment in India (2024) useful and that it helped you understand the benefits of buying gold coins for investments.